July 10, 2008

Austereo Group talks down digital expectations

Source: Nick Tabakoff, The Australian

AUSTRALIA'S
leading radio networks, including the Austereo Group, are likely to
operate just one additional station for each licence they hold when
digital radio is introduced at the beginning of next year.

The
revelation comes in the wake of concerns expressed last week in the
industry about possible digital radio black spots in the five mainland
state capital cities, which could result in more than 20 per cent of
city areas being left without indoor reception.

Initial expectations were that the digital radio, scheduled for
launch on January 1, 2009, would see each metropolitan radio station
launch up to three new stations, along with their existing current
analogue station offering, on to the digital platform.

But Peter Harvie, chairman of Austereo, Australia's largest radio
network, told The Australian the group was likely to launch just one
additional station for each one it now operated, when digital radio
commenced.

He said the existing licences would be able to operate, in all, "two
stations (and offer) data, plus still pictures, plus interactivity".

Digital radio is slated to offer features like slideshows, graphics, animation, text and enhanced audio quality.

Austereo operates 10 stations in the five mainland state capitals through the Today and Triple M networks.

This means it is likely to have 20 stations once digital radio begins.

Mr Harvie said that while the network was "hopeful" of being ready
for a January 1 launch, operating more than one station could
compromise quality.

An Austereo source said: "Our primary business is music, and we'll want to keep the quality up."

Other radio industry sources have also indicated they may stop at
two stations -- a simulcast of their existing analogue station, plus
one other offering -- when digital commences.

Fairfax Radio boss Graham Mott said he would not be throwing huge
resources at the new spectrum. "With initial penetration being slow,
you don't want to spend a lot of money on something that will take a
long time to give a return.

"Initially, the most important thing is to make sure your main analogue service is on digital," he said.

Sources at Macquarie Radio, which operates two stations, including
Sydney's leading station, 2GB, said the station was looking for
cost-effective options, including the possibility of "experimenting
with music formats for a younger demographic".

Meanwhile, Austereo yesterday announced a one-year contract
extension for its CEO, Michael Anderson, who has championed the
company's transformation into a cross-platform digital media company,
until mid-2009.

Mr Harvie said his CEO was a man for the current media climate.

"Our best estimate is that, in addition to our core radio
listenership, another 20 per cent of our listening is done online, on
iPods and on mobiles. Michael is very technology savvy, always pursuing
new opportunities."

Among Mr Anderson's projects has been to trial a possible new
youth-oriented digital music station -- tentatively entitled Super
Fresh -- featuring edgy music, for a possible January 1 launch.